Item A2 - Part-year tax-free threshold

This item is only to be completed if the taxpayer changed residency either by commencing or ceasing residency during the income year. This information is used to adjust the tax-free threshold on a pro-rata basis.

If the taxpayer's residency changed during the current income year and the only income is from Australian Government sources for Australian Government allowances and payments like Newstart, Youth Allowance and Austudy payments (item 5) or Australian Government pensions and allowances (item 6) then your client might be entitled to a full tax-free threshold and it might not be necessary for item A2 to be completed. Contact the Tax Agent Liaison Office Help Desk at the ATO if you are in doubt.

Completing the label

Enter the dates in:

Australian residency start
Australian residency end date

If you are ceasing Australian residency, you must enter a start date. If that was before 1 July 2019, then enter 01/07/2019 in the start field.

Label N - Months eligible for threshold will be automatically populated with the number of months based on the dates entered.

Eleven (11) is the maximum number of months applicable to this field, therefore if the date entered results in 12 being calculated, delete the date and do not enter this item as the reduced tax-free threshold would not be applicable to this taxpayer.

Foreign residents are not entitled to a tax-free threshold.

Residents are entitled to the full tax-free threshold of $18,200.

Where a person changes their residency during the year, they are entitled to a part-year tax-free threshold.

Part-year residents are entitled to a tax-free threshold of $13,464 plus a pro-rated amount for each month they are a resident of Australia. We will work out your tax-free threshold for you using the information you provide at this item. If you want to work it out, follow the steps below.

Multiply the number of months as an Australian resident by $395.
Add $13,464.

The total is your part-year tax-free threshold.

For medicare levy calculation, see Part-year residency in Medicare Levy Worksheet